Our Stock Exchange, Bursa Malaysia as a public listed company needs to add value to its shareholders by having increased profitability. The larger the volume of share trading in the share market, the better the earnings of Bursa Saham. However, the interesting part is that it’s also our market regulator which needs to stamp out unwanted volatily due to speculation.
This Catch-22 situation came about when Devanesan Evanson, Bursa’s chief regulatory officer, said in a recent interview.His other comments as follows:

• “Sometimes these excessively speculated companies occupy the top volume charts. It makes us look ridiculous, makes the whole country look ridiculous,”
• “But there are so many companies out there which trade below net tangible assets, or have price-earnings ratios in the single digits, that sometimes we tend to give them the benefit of doubt,”
• With foreign investors avoiding Malaysia because of the lack of liquidity in its heavyweight stocks, obscure retail counters, ranging from chicken farmers to high-tech start-ups, take centre stage. They can move wildly for no apparent reason.

To add credibility or corporate disclosure since it’s major shareholder is the Government which has a shareholding of about 40%, it is doing what it can to improve its credibility by

• co-developed a new set of indices with index-compiler FTSE, giving more weight to companies with larger free floats;
• called for Malaysia’s state-linked blue chips to sell more of their businesses into public hands to help boost liquidity and
• put more emphasis on disclosure and transparency, with a research collaboration with Standard and Poor’s aimed squarely at boosting coverage of its lesser-known companies.

The benchmark Kuala Lumpur Composite Index is Asia’s worst performer over the past year and the only market in the region to have lost ground with a drop of about 2 per cent.
Bursa’s own shares have climbed about 60 per cent in the past 12 months.Bursa has a market capitalisation of about US$854 million, (RM3.14 billion) one third of the Singapore Exchange’s. It’s now trading at about 32 times forcast earnings, making it the most expensive bourse in Asia after the Osaka Securities Exchange.